Cablegate: Iaea/Iran: Secretariat Tells Member States That

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OO RUEHWEB

DE RUEHUNV #0851/01 3210820
ZNR UUUUU ZZH
O 170820Z NOV 06
FM USMISSION UNVIE VIENNA
TO RUEHII/VIENNA IAEA POSTS COLLECTIVE IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 5780

UNCLAS UNVIE VIENNA 000851

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E.O. 12958: N/A
TAGS: AORC IAEA IR KNNP
SUBJECT: IAEA/IRAN: SECRETARIAT TELLS MEMBER STATES THAT
THE ARAK TC PROJECT WILL NOT ADVANCE ENRICHMENT AND
REPROCESSING ACTIVITIES.

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Summary
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1. (SBU) During a technical briefing on November 15, the
IAEA Secretariat advised that TC project IRA/9/019
(Strengthening Safety Capabilities for the Construction of a
research Reactor) was not directly linked to enrichment and
reprocessing activities, and the "Secretariat is certain this
project will not advance UNSC suspected activities."
Further, the Office of Legal Affairs (OLA) noted that there
was no legal constraint that precludes this project and
reiterated that it is up to the Board of Governors to
consider the proposed projects. This second technical
briefing on the proposed TC program was called in response to
Member State requests for additional information on the TC
program selection process and specifically Iran's proposed
projects. Representatives from the TC Department, Office of
Legal Affairs, and External Relations briefed on the TC
program selection procedures, including interdepartmental
review of proposed projects. According to the briefers, the
Secretariat draws on the IAEA Statute Article XI.E for broad

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selection criteria and INFCIRC/267 for guiding principles and
general operating rules.

2. (SBU) Several like-minded states, including the U.S.
(Australia, Canada, Finland, France, Japan, Norway, and the
UK) expressed concerns on Iran's proposed projects and
requested a written certification that the proposed Iran
projects are consistent with both prior Board and UNSC
decisions. Egypt, the only G-77 state other than Bolivia to
speak on the Iran issue, said they were satisfied with the
competency of the Secretariat to determine the relevancy of
Board and UNSC decisions and cautioned against
micromanagement of the TC program. Bolivia urged Member
States to find a consensus position, cautioning that "a vote
on the matter would compromise the whole TC package." The
Iranian delegation challenged the legitimacy of previous
Board and UNSC resolutions and reiterated Iran's intent to
move ahead on the heavy water research reactor with or
without Agency assistance. Iran cautioned that stopping the
project would send a negative political message to Tehran,
and could lead to legislation limiting cooperation with the
IAEA. End Summary.

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Project Selection Procedure
---------------------------

3. (U) The Technical Cooperation Department briefed on TC
Program Design on November 14. The briefing covered program
guidelines, including selection criteria laid out in
INFCIRC/267, "Revised guiding principles and general
operating rules to govern the provision of technical
assistance by the Agency" last updated in 1979. With regard
to sensitive technologies, INFCIRC/267 states that technical
assistance is to be subject to safeguards review. The
briefing also covered the programming process, with special
emphasis on the newly implemented Program Cycle Management
Framework (PCMF), an information technology-based project
design platform with role-based access for stakeholders. The
Secretariat review process includes screening by the TC

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Department for seven criteria (Agency's mission, requesting
government commitment, its national priorities,
sustainability, socio-economic benefit, previous assistance,
and regional implications). Technical departments screen
projects for appropriateness of technology, sustainability of
technology, safety, security and environmental
considerations, and appropriateness of the basic nuclear
infrastructure. The Safeguards Department screens projects
and project designs in sensitive technology areas relative to
safeguards. Projects are developed in a collaborative
process with Member States, and the proposed TC program is
presented to each Member State during the General Conference.
Project designs and funding levels are finalized after those
consultations. The Secretariat provided a slide
presentation, which Mission has faxed to ISN/MNSA.

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Member State Comments
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4. (SBU) The discussion focused on three areas: general
questions concerning the TC program selection process; the
late release of documents; and specific questions regarding
Iran's proposed projects, with a special focus on the Arak
Heavy Water Research Reactor (IRA/9/019) safety project.
Australia, Canada, France, Germany, Norway, the U.S, and the
UK asked for an explanation of the criteria used in screening
the Iran projects in light of safeguards concerns and the
relevance of earlier Board and UNSC decisions. The U.S.

requested assurances from the Secretariat that these projects
were consistent with those decisions and that the technical
assistance would not contribute to the transfer to Iran of
assistance that would contribute to their enrichment and
reprocessing activities as mandated by UNSCR/1696. France
and the UK asked that the Secretariat provide these
assurances in writing. Australia noted that until the Agency
completes its investigation of the Iran program, careful
consideration should be applied to all requests by Iran.
They noted that IAEA Statute Articles 3.A.5, 11.F.4, 12.A.7,
and 12.C are all relevant to the discussion. Canada noted
that the Board's prior finding of Iran non-compliance under
Article 12.C provides authority to suspend technical
cooperation. Canada noted that the size of the Iranian Heavy
Water Research Reactor was unnecessarily large for its stated
purpose of producing medical isotopes and conducting
training, but is optimal for producing plutonium. Japan
asked if the new TC Program Cycle Management Framework (PCMF)
encouraged participation from all stakeholders, including
donors, in the project selection process.

5. (SBU) France asked if there was a legal basis to link TC
assistance to a state's full compliance with its safeguards
obligations. Other states, the French delegation noted,
should make an extra effort to ensure that they abide by
UNSCR/1696 that calls on UN members not to assist Iran
enrichment or reprocessing activities. France encouraged the
Secretariat to fully review all proposed Iran projects and

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provide assurances that they did not contribute to these
activities. Germany asked if the Secretariat had reviewed
the Heavy Water Research Reactor for its technical
appropriateness to perform its purpose as proposed by Iran.

6. (SBU) Two G-77 member states, Egypt and Bolivia, spoke
on Iran's proposed projects. Egypt noted that all the
questions on Iran's program had come from donors and
suggested that the absence of comment by recipients is
indicative of their satisfaction with the TC process. Egypt
said that the donor's questioning and their role in the
process raises the issue of voluntary TC funding. Egypt
suggested that the Secretariat address a change in the
funding process. Egypt cautioned against micromanagement and
stated that they are satisfied with what the Secretariat
said. Egypt asked how similar UNSCRs were dealt with in the
past, highlighting the case of Israel.

7. (SBU) Bolivia noted that nuclear technology is essential
for developing nations and cautioned against politicizing the
issue. Since Iran's program is in question, the Board has to
be "careful to minimize the impact so that it doesn't
compromise the whole package of TC." Bolivia added that a
vote would damage the cooperation that has been built between
developed and developing states, noting consensus must be
reached. The Bolivian delegate concluded by noting that it
appeared that the question concerns one project in Iran, not
Iran's whole program.

8. (U) Other comments by G-77 concerned the distribution of
projects between each of the regions and the percentage of
unfunded Footnote-a projects.

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Secretariat Response - No Linkage

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---------------------------------

9. (SBU) In response to the questions, the Secretariat
reiterated that staff follows criteria established in
INFCIRC/267, which specifically calls for a safeguards review
of proposed projects. For the 2007-2008 Proposed TC Program
they received written notice from the Safeguards Department
that there were no projects of concern. The Office of
External Relations noted that the Director General (DG)
requested that in light of previous concerns regarding Iran,
that the projects be additionally reviewed in four sensitive
areas. Based on this review, "Project IRA/9/019 does not
have a direct link to enrichment or reprocessing activities."
Further, it was the Secretariat's view that "these programs
will not contribute to the advancement of UNSCR suspected
activities."

10. (SBU) The Office of Legal Affairs (OLA) noted that a
footnote referencing BOG and UNSC resolutions was added to
the Arak project description in the Agency's project listings
document. This reference was added to "make the Member
States aware" and "to ensure them that it was taken into
account." OLA noted that the Iran projects were screened for
relevance to the UNSCR by different Agency Departments.
Further since this is a DG report, it was approved by the DG
after "a very thorough clearance and screenings process."
OLA said that they studied INFCIRC/267, the IAEA Statute, and
previous BOG and UNSC resolutions and noted that neither the

BOG nor UNSCR referred to suspending TC in Iran.
Additionally, there has been no call on Iran to suspend the
Heavy Water Research Reactor, only reconsider the project.
The Secretariat concluded there was no legal constraint that
precludes accepting this project; therefore it would be up to
the Board to decide.

11. (SBU) In response to France's question concerning the
link between receiving technical assistance and meeting
safeguards obligations OLA noted that INFCIRC/267 is explicit
in requiring a safeguards review of projects. OLA noted
there is no language in the Statute that releases it from
meeting its obligations under safeguards if technical
assistance is suspended. OLA cited four cases where the BOG
approved suspension of TC after UNSC resolutions, Israel in
1981, Iraq in 1990, Yugoslavia in 1992, and the DPRK in 1994.

12. (SBU) The Secretariat acknowledged that the documents
were released late and said that they would try to release
them earlier in the future.

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Iran Comments
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13. (SBU) Iranian Ambassador Soltanieh reiterated comments
made in the Agency's first technical briefing on the proposed
TC program on November 2.

-- The Agency should not allow the TC selection process to
be politicized.
-- The IAEA Statute, Article 3 states the Agency should
provide technical assistance without making the assistance
"subject to any political, economic, military, or other
conditions."
-- The General Conference, as the highest authority of the
Agency, approved a resolution in September 2006 calling on
states to seek safety reviews and safety assistance from the
Agency. Further, states should adopt safety standards to
prevent another Chernobyl.
-- Members should not underestimate the technical competence
of the Secretariat in making selection decisions.
-- Iran's Heavy Water Reactor will be operational, as a
national project, because Iran needs it desperately. It is
better to have it under safeguards and under the Safety
Department. Iran wants to ensure that it meets applicable
safety standards.
-- All of Iran's small scale reprocessing activities had
been stopped 14 years ago. There is no legal basis for
previous BOG and UNSC resolutions.
-- The Heavy Water Research Reactor was fully reviewed,
including the hot cells. The hot cells are not capable of
reprocessing, even though Iran has the right to reprocess.
There are no limits in the Statute on reprocessing, but Iran
is not going to reprocess.
-- The Heavy Water Research Reactor will be used for the
production of medical isotopes.
-- A negative decision on this project will be "politically
messy for Iran" and could lead to legislation from Tehran's
Parliament that would limit cooperation with the Agency.
-- Applying IAEA Statute Article 12.C in this case is not
valid because the process has not been followed; inspections
have continued in Iran and the suspect activity happened many
years in the past.
-- If Iran instead built a light water reactor it would need
to produce Highly Enriched Uranium (HEU) at Natanz, enriched
to 92%, in order to produce the needed medical isotopes.
-- The Heavy Water Research Reactor needs to be very
powerful to produce the same neutron flux as a less powerful
light water reactor.

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Comment
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14. (SBU) The Secretariat's declaration that there is no
linkage between the Heavy Water Research Reactor project
(IRA/9/019) and relevant Board and UNSC resolutions has no
doubt given some wavering states sufficient rationale to
accept inclusion of the project in the Agency's TC program.
Through briefings and bilateral meetings, UNVIE is working to
assure that all Board Members and other influential
delegations understand the implications of the Arak project
and support an acceptable outcome.
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